* Nikkei hits 6-year closing high, Europe shares edge up
* U.S. dollar inches higher
* Gold falls, on track for largest annual loss in 32 years
* Several European stock markets closed for Xmas holiday
* China cash squeeze eases after central bank injects funds
* South Sudan unrest pushes up Brent crude
By Sudip Kar-Gupta
LONDON, Dec 24 Japan's benchmark stock index
hit a six-year closing high on Tuesday, helping prop up
global equities, while the U.S. dollar inched higher, and
some traders saw world stock markets extending their 2013 rally
into next year.
Several European stock markets were closed on Tuesday for
the Christmas holiday break, but pan-European equity indexes
such as the FTSEurofirst 300 and the STOXX 600
nevertheless crept up in early morning trading.
That followed a rise in Asian stock markets, where Tokyo's
Nikkei rose 0.1 percent to reach its highest closing
level in six years.
The MSCI world equity index, which tracks
shares in 45 countries, was steady at 402.82 points, while the
MSCI Emerging Markets equity index rose 0.3 percent.
The MSCI global equity index has risen nearly 19 percent
since the start of 2013, helped by injections of liquidity from
the Japanese and U.S central banks and by signs the global
economy is recovering from the 2008 credit crisis.
Those central bank programmes have dented returns on bonds
and cash, driving many investors over to the better returns
available from equities. SteppenWolf Capital chief investment
officer Phoebus Theologites felt equities would remain the
favoured asset class for 2014.
"Equities could well have another 15 percent return next
year. It's sentiment-driven, there are few other places where
you will get those sort of returns," he said.
GOLD SET FOR BIGGEST ANNUAL LOSS IN 32 YEARS
Investors kept a wary eye on China's benchmark money market
rate, after rates in the interbank market spiked to their
highest level since June in recent days due partly to seasonal
factors that increase banks' demand for cash near the end of
The People's Bank of China injected funds through normal
channels for the first time in three weeks, although traders
warned that conditions remained tense.
"The relief is quite palpable after the cash injection by
the PBOC today," said Jackson Wong, Tanrich Securities
vice-president for equity sales.
Another area of concern was civil unrest in South Sudan,
which led to Brent crude remaining above $111 a
barrel on Tuesday.
On the currency markets, the U.S. dollar rose slightly as
upbeat U.S. consumption data fostered hopes of a solid recovery
in the world's largest economy and reinforced convictions that
the Federal Reserve will continue to tighten monetary policy.
The improving global economic environment, coupled with a
rally on world stock markets which has seen U.S equity indexes
hit all-time highs, has driven investors away
from traditional safe-haven assets such as gold.
Gold was hovering below $1,200 on Tuesday and looked likely
to fall to its lowest level in six months. Gold is down nearly
30 percent for the year, and is set for its biggest annual
decline in 32 years.
Links to main market reports
- Global markets - Oil markets
- FX markets - Emerging markets
- Euro sovereign debt - Metals
- U.S. Treasuries - European stocks
- Japanese stocks - U.S. stocks
- Money markets